Units of Measure (UOM)
How much Coca Cola is in this picture?
70 containers, 564 fl oz, or just enough for 1 company party?
All of these answers could be correct. It all depends on how you measure Coca Cola.
For inventory and Manufacturing, how you measure parts is commonly referred to as Units of Measure.
Units of Measure is the business term used to describe how an inventory item (part) is counted.
While there are many correct options for an inventory or manufactured part’s Unit of Measure (UOM), choosing the right one will result in fewer stockouts, less over-purchasing, and less time spent counting and cleaning up inventory mistakes.
How to pick a unit of measure for raw materials
- Make it intuitive. When you say I need to use ___ much of this inventory; what is that unit that best describes the quantity?
- For materials measured in volumes or weights, try to stick to numeric standard units (imperial and metric). These are less open for interpretation.
- For materials like packaging and discrete components try to stick to counting units (Each, bottle, bag)
- Don’t let your vendors sales unit of measure dictate your Stocking Unit of Measure, you might change vendors or your vendors might change how they package and sell to you.
- Try to reduce errors by picking a unit that does not require excessive decimal places or commas perform common transactions.
How to pick Units of measure for finished goods
- Many of the same guidelines as raw materials
- Don’t forget to assign a part number for the intermediate subassembly, or your units of measure problem will compound.
- For Manufactured products the unit of measure can often be dictated based on how it is packed or sold. Often raw materials are combined to a bulk part number, often using standard units of (weight, volume) and NEW part numbers are then used based on the quantity packaged. Back to the coke example. Bulk coke is measured in ounces, and different part numbers for finished packaged goods consume the liquid bulk product
Part number “Filled Coke can” consumes 12 oz. of bulk coke and produces 1 can,
Part number 2 L
Part Number 16 OZ
- Make the unit of measure for your finished goods intuitive. Often the finished goods are sold in countable units of measure (each, can, bottle) What you set as your final unit of measure does not preclude or corner you into a sales unit of measure. For example, the unit of measure might be cans. But you can choose only to sell in “Fridge packs”.
Dealing with Unit of Measure (UOM) Conversions
Once you have selected and defined the right UOM for a Part. It may be helpful establish conversions so employees have less manual counting to do. No matter how your vendors supply materials, your inventory will be recorded accurately in terms of the appropriate stocking Unit of Measure.
Units of Measure (UOM) in Bills of Material
For scalable Bills of Material, specify component quantities using a standard quantity that accurately maps the component UOM to a single unit of the produced part’s unit of measure. This will eliminate painful Units of Measure errors so you can manage growth with both speed and accuracy.